W.P. Carey's Opportunistic and Thoughtful Approach to Inflation
Inflation is insidious, slowly eating away at the value of money over time. Although Inflation is running hot today, it is almost always present and normally so slow that the hit to your buying power goes unnoticed. W.P. Carey (NYSE: WPC) has noticed and was prepared in advance for today's sharp inflation spike.
Here's how this real estate investment trust (REIT) protects itself -- and its shareholders -- from rising prices.
From a big-picture perspective, W.P. Carey doesn't do anything particularly unique. It is just one of many REITs that use the net lease model. This means it owns properties that it leases to single tenants, and those tenants are responsible for most property-level operating costs. Although any one asset is high-risk, since there's only one tenant, across the company's over 1,440 properties, the risk is pretty low. Notably, tenants have to deal with increasing costs for things like property maintenance.
Source Fool.com
